FCRA Class Action Defense Cases–Beaudry v. Telecheck: Sixth Circuit Reverses Dismissal Of FCRA Class Action Holding Private Right Of Action Under FCRA Does Not Require Proof Of Actual Damages

District Court Erred in Dismissing Class Action Complaint Alleging Violations of Fair Credit Reporting Act (FCRA) on Ground that Plaintiff had not Suffered any Actual Injury because FCRA Allows for Recovery of Statutory Damages for Willful Violations Without Showing of Actual Injury Sixth Circuit Holds

Plaintiff filed a putative class action against Telecheck Services and others alleging violations of the federal Fair Credit Reporting Act (FCRA); specifically, the class action complaint alleged that defendants – “a group of foreign corporations who provide check-verification services” – “failed to account for a 2002 change in the numbering used by the Tennessee driver’s license system, leading their systems to reflect incorrectly that many Tennessee consumers…were first-time check-writers.” Beaudry v. Telecheck, ___ F.3d ___ (6th Cir. August 28, 2009) [Slip Opn., at 1, 2]. According to the allegations underlying the class action complaint, defendants’ actions constituted a “willful failure to provide accurate information [and] entitled the class members to ‘declaratory relief, injunctive relief, statutory damages, punitive damages, attorneys’ fees, costs and expenses.’” _Id._, at 2. Defense attorneys moved to dismiss the class action complaint on the grounds that (1) plaintiff “failed to allege that she had been injured by a FCRA violation,” and (2) “that the statute of limitations had run.” _Id._ The district court dismissed the class action , holding that plaintiff “had not alleged any injury and that the statute does not authorize courts to grant injunctive relief.” _Id._ Plaintiff appealed_._ The Sixth Circuit stated at page 1, “Because FCRA’s private right of action does not require proof of actual damages as a prerequisite to the recovery of statutory damages for a willful violation of the Act, we reverse.”

The Circuit Court began by summarizing the FCRA, and the differences between negligent violations of the FCRA and willful violations of the FCRA. See Beaudry, at 2-3. Of particular relevance is the fact that willful violations allow a party to recovery statutory damages without showing actual injury. Id., at 4-5. Defense attorneys nonetheless argued that the FCRA requires a showing of some form of “consequential damages” – in this case, however, plaintiff “‘has not…had a check rejected or any other transaction terminated as a result of a TeleCheck recommendation’; nor has she ‘suffered any harm with respect to the availability of credit.’” Id., at 4. The Sixth Circuit disagreed, noting that the FCRA “imposes no such hurdle on willfulness claimants.” Id. Rather, the FCRA allows for the recovery of either actual damages (in the event the violation was negligent) or statutory damages as fixed by Congress (in the event the violation was willful). Id., at 5-6. Accordingly, the district court erred in dismissing the class action complaint on the ground that plaintiff had not suffered any actual injury, id., at 9. The Circuit Court therefore reversed the district court order and remanded the class action for further proceedings. Id., at 10.

Class Action Court Decisions FCRA Class Actions Uncategorized

New Labor Law Class Actions Maintain Top Spot Among Weekly Class Action Lawsuits Filed In California State And Federal Courts

As a resource to California class action defense attorneys, we provide weekly, unofficial summaries of the legal categories for new class action lawsuits filed in California state and federal courts in the Los Angeles, San Francisco, San Jose, Sacramento, San Diego, San Mateo, Oakland/Alameda and Orange County areas. We include only those categories that include 10% or more of the class action filings during the relevant timeframe. This report covers the time period from September 4 – 10, 2009.

Class Actions In The News Uncategorized

Class Action Defense Cases—In re Citigroup Securities Litigation: Judicial Panel On Multidistrict Litigation (MDL) Grants Defense Motion To Centralize Class Action Litigation In Southern District Of New York

Judicial Panel Grants Defense Request for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407, Opposed by California Class Action Plaintiffs, and Transfers Class Actions to Southern District of New York Ten class actions – nine in New York and one in California – were filed against various Citigroup entities alleging securities laws violations “by misleading investors about the nature of Citigroup’s investments and the company’s financial condition.

Class Action Court Decisions Multidistrict Litigation Uncategorized

CAFA Class Action Defense Cases–Manson v. GMAC Mortgage: Massachusetts Federal Court Denies Motion To Remand Class Action To State Court Holding Class Action Removable Under CAFA

Class Action Properly Removed to Federal Court under Class Action Fairness Act (CAFA) because Defendants Adequately Established $5 Million Amount in Controversy and because Plaintiffs Failed to Establish that Local Controversy Exception or Home-State Controversy Exception Applied Massachusetts Federal Court Holds

Plaintiffs filed a putative class action in Massachusetts state court against GMAC Mortgage and various other defendants challenging defendant’s mortgage foreclosure practices; specifically, the class action complaint alleges GMAC violated Massachusetts state law in connection with its foreclosure proceedings because “the foreclosed mortgages had not been validly assigned to the foreclosing banks at the time the foreclosure actions were undertaken.” Manson v. GMAC Mortgage, LLC, 602 F.Supp.2d 289, 291-92 (D. Mass. 2009). Plaintiffs’ class action seeks to represent some 1000 people, all residents of Massachusetts residents, “whose primary residence was foreclosed by a power of sale…by a defendant that did not contemporaneously possess a written assignment of the underlying mortgage at the time the Notice of Sale was served” or “who face a pending foreclosure initiated by a defendant that did not have a written assignment of the underlying mortgage when the Notice of Sale was served and/or when a Right to Cure notice was sent.” Id., at 292. According to the allegations underlying the class action complaint, “the defendant banks and law firms knew that the foreclosures violated: (i) the Statute of Frauds…; (ii) the statutory notice and sale requirements…; and (iii) the common-law duty of good faith and diligence.” Id. Defense attorneys removed the class action to federal court under CAFA (Class Action Fairness Act), id. Plaintiffs moved to remand the class action to state court on the grounds that the $5 million amount-in-controversy had not been shown and that CAFA’s “local controversy” or “home-state controversy” exceptions required that the district court “decline jurisdiction.” Id. The district court denied plaintiffs motion, concluding that the class action had been properly removed.

The federal court began by noting that CAFA, inter alia, creates federal jurisdiction over class actions with minimal diversity where the combined amount in controversy exceeds $5 million and the class action involves 100 members or more. GMAC, at 293. Plaintiffs conceded that minimal diversity was present and that the putative class contained more than 100 members, but insisted that it was not “reasonably probable” that the amount in controversy exceeded $5 million at the time of removal. Id. (In this regard, the district court observed that the time of removal was the relevant inquiry because “[e]vents subsequent to removal that reduce the amount in controversy do not divest a federal court of CAFA jurisdiction.” Id., at 293 n.5 (citing Coventry Sewage Assocs. v. Dworkin Realty Co., 71 F.3d 1, 6 (1st Cir. 1995)).) Under plaintiffs’ analysis, the class action seeks primarily injunctive and declaratory relief, and each class members’ monetary damage is approximately $1200; thus, the amount in controversy is only $1.2 million. GMAC, at 293. Defense attorneys countered that a total of 3,934 loans were “referred for foreclosure” during the putative class period, with 1,048 of these loans proceeding to foreclosure and 48 foreclosed properties being sold to third parties for more than $15 million. Id., at 293-94. GMAC argued that this fact went directly to “plaintiffs’ contingent claim that defendants may be liable for the collective replacement value of the homes that were foreclosed.” Id., at 294 n.8. In the alternative, defense attorneys argued that “the actual amount assessed foreclosed borrowers in costs and fees was approximately $8,000 per transaction,” not the $1200 figure provided by plaintiffs, which would make the amount in controversy approximately $8 million. Id., at 294. The district court found defendant’s evidence sufficient to meet the amount in controversy test, id.

Class Action Court Decisions Class Action Fairness Act (CAFA) Removal & Remand Uncategorized

Class Action Defense Cases–Walker v. Motricity: California Federal Court Remands Class Action To State Court Holding CAFA’s Amount In Controversy Requirement Not Met And Sanctions Defendant For Removal

Class Action Improperly Removed to Federal Court (Twice) because Defendant Failed to Establish $5 Million Amount in Controversy Required by Class Action Fairness Act (CAFA) and Basis for Defendant’s Removal of Class Action Warrants Sanctions Sua Sponte California Federal Court Holds

Plaintiff filed a putative class action in California state court against Motricity alleging violations of every conceivable statute, including the kitchen sink (see NOTE), arising from Motricity’s alleged act of billing for unwanted mobile content. Walker v. Motricity Inc., 627 F.Supp.2d 1137, 1139-40 (N.D. Cal. 2009). According to the allegations underlying the class action complaint, Motricity “allegedly operates mobile transaction networks to help companies develop, deliver and bill for ‘mobile content’ services to compatible mobile devices in California and the nation,” including such services as “customized ring tones, premium text messages, and sports score reports,” and is purportedly “able to reach and bill millions of wireless subscribers nationwide and has registered thousands of transactions and processed thousands of dollars in California over recent years.” Id., at 1139. Plaintiff alleges that Motricity billed her for “unwanted mobile content services on her cellular telephone bill in the form of premium text messages” that she did not authorize, leading to the filing of her class action. Id., at 1139-40. But plaintiff’s act of excessive pleading was more than matched by defendant’s act in response. Defense attorneys removed the class action to federal court under the Class Action Fairness Act (CAFA), but the district court granted plaintiff’s motion to remand the class action on the ground that Motricity failed to show the requisite $5 million amount in controversy. Id., at 1139, 1140. Defense attorneys again removed the class action to federal court under CAFA “just fifteen days later,” based on a declaration filed by plaintiff’s counsel in an unrelated action which (Motricity alleged) set forth a ratio for revenue that would (if applied in this case) meet the $5 million threshold for removing class actions under CAFA. Id., at 1140. Plaintiff again moved to remand it to state court. Id. The district court granted plaintiff’s motion, and awarded sanctions for frivolous removal of the class action.

After summarizing CAFA and noting the removing party’s burden of demonstrating that removal jurisdiction exists, see Walker , at 1140-41, the federal court observed that Ninth Circuit authority establishes “different burdens of proof for establishing removal jurisdiction in the CAFA context, depending on what has been pled in the complaint,” id., at 1141. If the class action complaint specifically alleges the amount of damages at issue, then it must appear to a “legal certainty” that the amount prayed for is incorrect; in other words, “If the complaint alleges specific damages in excess of the jurisdictional minimum, then the amount in controversy is presumptively satisfied unless it appears to a ‘legal certainty’ that the claim is actually for less than the jurisdictional minimum, whereas if the specific damages are less than the statutory minimum, it must be shown to a legal certainty that the amount in controversy exceeds that minimum for removal.” Id., at 1141 (citation omitted). But if the complaint does not specify the amount in controversy, then “then the court must look beyond the facts of the complaint and apply the preponderance of the evidence standard.” Id. (citations omitted). In its initial order granting plaintiff’s motion to remand the class action to state court, the district court noted that the class action complaint is silent as to the amount in controversy so Motricity was required to show that the amount in controversy exceeded $5 million. Id., at 1141-42. Because it failed to meet that burden, the court remanded the class action to state court. Id.

Class Action Court Decisions Class Action Fairness Act (CAFA) Removal & Remand Uncategorized

Class Action Defense Cases–Garza v. Swift: Arizona Supreme Court Holds Court Of Appeals Lacked Jurisdiction To Hear Appeal From Trial Court Order Denying Class Action Certification Motion

Trial Court Order Denying Class Action Treatment not Appealable because not “Final Judgment” so Court of Appeals Erred in Exercising Appellate Jurisdiction to Review Order Denying Class Action Certification Arizona Supreme Court Holds Plaintiff filed a putative class action in Arizona state court against his former employer, Swift Transportation, a trucking company, alleging labor law violations; specifically, the class action complaint alleged that Swift paid its truck drivers per “dispatched mile” but “systematically underestimated mileage and, by doing so, routinely underpaid its drivers.

Certification of Class Actions Class Action Court Decisions Employment Law Class Actions Uncategorized

HAPPY LABOR DAY FROM THE CLASS ACTION DEFENSE BLOG

The author of the Class Action Defense Blog wishes all of you a very happy Labor Day. A new class action article will be published tomorrow.

Class Actions In The News Uncategorized

Labor Law Class Action Lawsuits Regain Top Spot Among New Class Action Lawsuits Filed In California State And Federal Courts

In order to allow class action defense attorneys anticipate the types of class actions against which they will have to defend in California, we provide weekly, unofficial summaries of the legal categories for new class action lawsuits filed in California state and federal courts in the Los Angeles, San Francisco, San Jose, Sacramento, San Diego, San Mateo, Oakland/Alameda and Orange County areas. We include only those categories that include 10% or more of the class action filings during the relevant timeframe.

Class Actions In The News Uncategorized

Class Action Defense Cases—In re Celexa & Lexapro: Judicial Panel On Multidistrict Litigation (MDL) Grants Defense Motion To Centralize Class Action Litigation But Transfers Class Actions To Massachusetts

Judicial Panel Grants Defense Request for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407, Unopposed by Class Action Plaintiffs, but Transfers Class Actions to District not Mentioned by Any of the Parties, the District of Massachusetts Two class actions – one in Missouri and one in New York – were filed against various defendants, including Forest Laboratories and Forest Pharmaceuticals alleging that defendants “engaged in false and misleading promotion of Celexa and Lexapro for pediatric or adolescent use and sought to induce physicians and others to prescribe Celexa or Lexapro by providing them with various forms of illegal remuneration.

Class Action Court Decisions Class Actions In The News Multidistrict Litigation Uncategorized

Class Action Defense Cases–Proctor v. Metropolitan Money Store: Maryland Federal Court Denies Defense Motion To Dismiss Class Action Claims But Grants Plaintiffs’ Motion To Dismiss Counterclaims And Certifies Class Action

Class Action Complaint Adequately Pleaded Claims Against Individual Defendants Arising out of Alleged “Mortgage Foreclosure Rescue Scam” but Defendants’ Counterclaims for Fraud were Barred by Doctrine of Res Judicata Maryland Federal Court Holds Plaintiffs filed a putative class action against Metropolitan Money Store and others alleging that they were “involved in a mortgage foreclosure rescue scam”; specifically, the class action complaint alleged that plaintiffs were “homeowners with substantial equity in their homes, but who were nevertheless facing foreclosure” which “made them targets of Defendants’ promise of credit repair and foreclosure avoidance, which, in actuality, involved fraudulent representations and transactions designed to siphon off the equity in the homeowners’ homes, thus leaving them in a far worse position than before.

Class Action Court Decisions Uncategorized